4. The current yield on bond B, which has semiannual coupons, is 7.08% and the bond was sold at par (i.e., at a price of $1,000) three years ago, when the YTM on similar bonds was 8.0%. If there are 12 years until maturity, what would be the YTM to an investor who buys the bond today? (Hint: If the bond's price was $1,000 three years ago, when the market interest rate was 8.0%, what must be the coupon rate? If you know the coupon and the current yield, you can solve for the price. Remember that to find the current yield on a bond with semiannual coupons, you must divide the yearly payment - two coupons - by the price. Now you can enter numbers in your financial calculator to find the periodic interest rate. Remember that for bonds with semiannual coupon payments, the YTM is the APR.) 5. A 20-year bond with $1,000 face amount and 7% annual coupons was issued twenty years ago. You bought the bond six years ago, immediately after a coupon was paid, when the market interest rate on such bonds was 6%, and you sold it two years ago, immediately after a coupon was paid, when the market interest rate was 5%. What rate of return did you earn over the period when you held the bond? (Hint: You must figure out what you paid to buy the bond, what you received when you sold the bond, and what other payments you received. Then use the FV, PV, PMT and N keys in your calculator.)